Document Content

DECISION No. 55/2004/QD-BTC OF JUNE 17, 2004 PROMULGATING THE REGULATION ON ORGANIZATION AND OPERATION OF SECURITIES COMPANIES

THE FINANCE MINISTER

Pursuant to the Government's Decree No. 144/2003/ND-CP of November 28, 2003 on securities and securities market;

Pursuant to the Government's Decree No. 77/2003/ND-CP of July 1, 2003 defining the functions, tasks, powers and organizational structure of the Finance Ministry;

At the proposal of the Chairman of the State Securities Commission,

DECIDES:

Article 1.- To promulgate together with this Decision the Regulation on organization and operation of securities companies.

Article 2.- This Decision takes effect 15 days after its publication in the Official Gazette.

Article 3.- The Chairman of the State Securities Commission, securities companies and involved parties shall have to implement this Decision.

For the Minister of Finance

Vice Minister
LE THI BANG TAM

REGULATION ON ORGANIZATION AND OPERATION OF SECURITIES COMPANIES

(Promulgated together with the Finance Minister's Decision No. 55/2004/QD-BTC of June 17, 2004)

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of application

This Regulation prescribes the organization and operation of securities companies established in the territory of the Socialist Republic of Vietnam.

Article 2.- Interpretation of terms

In this Regulation, the terms and phrases below shall be construed as follows:

Securities companies mean joint-stock companies and limited liability companies established under the Vietnamese law to trade in securities according to their securities business licenses granted by the State Securities Commission.

Securities business staff members mean persons working in divisions (sections, departments) specialized in conducting securities business of various forms.

Chapter II

GRANTING OF SECURITIES BUSINESS LICENSES

Article 3.- Principles for granting securities business licenses

1. Securities companies shall be licensed to conduct securities business of one or several forms defined in Clause 2 and the services defined in Clause 3, Article 65 of the Government's Decree No. 144/2003/ND-CP of November 28, 2003 on securities and securities market (Decree No. 144/2003/ND-CP). Issuance underwriting licenses shall be granted only to companies having dealing licenses.

2. To conduct securities business in Vietnam, foreign securities business organizations must establish joint-venture companies with Vietnamese partners under licenses granted by the State Securities Commission after getting the approval of the Finance Ministry.

Article 4.- Conditions for granting securities business licenses

Companies shall be considered for granting of securities business licenses when satisfying the conditions prescribed in Article 66 of Decree No. 144/2003/ND-CP.

Article 5.- Dossiers of application for business licenses

1. For securities companies with 100% domestic capital, a dossier of application for securities business license comprises:

a/ An application for securities business license (made according to a set form);

b/ Tentative business plan for the first 3 years;

c/ The company's charter;

d/ Written description of material and technical foundations and facilities in service of securities business (made according to a set form);

e/ Written record of capital contributions of the founding shareholders for joint-stock companies, the founding members, for limited liability companies with two or more members or the owner's capital assignment decision, for one-member limited liability companies;

f/ Valid copies of business registration certificates of legal persons contributing capital for establishment of the securities company;

g/ Financial statements of legal-person parties that each contributes over 10% of the securities company's charter capital;

h/ Curricula vitae of members of the managing board, the members' council and president of the company (made according to a set form);

i/ Valid dossiers of application for securities business practice certificates, as prescribed in Article 32 of this Regulation, of the general director, the deputy general director (director and deputy director) and business staff members of the company;

j/ Valid dossiers of two staff members conducting the securities custody operation according to the provisions of the Regulation on securities registration, custody, clearing and payment, promulgated by the Finance Ministry.

2. For joint-venture securities companies, a dossier of application for securities business license comprises the documents prescribed at Points a, b, c, d, g, h, i and j, Clause 1, Article 1 and the following documents:

a/ Valid copies of establishment licenses or business registration certificates or equivalent legal documents of the parties to the joint-venture;

b/ Copies of charters of the parties to the joint-venture;

c/ Joint-venture contract;

d/ List, curricula vitae and work permits of foreigners working in Vietnam.

3. In the dossiers of application for securities business licenses of joint-venture securities companies, papers being copies must be lawfully certified by the competent agencies of localities where the foreign parties to the joint ventures are headquartered and have their Vietnamese translations notarized by the Vietnamese notary public.

4. A dossier of application for securities business license sent to the State Securities Commission shall include one original set and two copy sets.

Article 6.- Procedures for granting securities business licenses

1. The time limit for granting securities business licenses shall be 60 days after the State Securities Commission receives valid dossiers. In case of refusal to grant securities business licenses, the State Securities Commission must clearly state the reasons therefor in writing.

2. After receiving the State Securities Commission's written in-principle approval of granting of securities business licenses, securities business license-applying organizations shall have to wholly transfer their charter capital into blocked accounts at banks designated for payment. Those amounts shall be released after the applying organizations are officially granted securities business licenses.

3. In cases where the charter capital contains a proportion of capital contributed in kind or with land use right, securities business license-applying organizations must send to the State Securities Commission the papers evidencing the ownership or use right and value of contributed capital in kind.

4. The State Securities Commission shall officially grant securities business licenses after the applying organizations complete the business registration procedures according to current law provisions, for securities companies with 100% domestic capital, or after the applying organizations complete the procedures for blocking capital according to the provisions of Clause 2 of this Article, for the establishment of joint-venture securities companies.

Article 7.- Amendment and supplementation of securities business licenses

1. Securities companies which have already been granted securities business licenses and wish to modify or add securities business forms shall have to carry out the procedures for amending and/or supplementing their securities business licenses.

2. A dossier of application for modification or addition of securities business forms comprises:

a/ An application for modification or addition of securities business forms;

b/ Resolution of the shareholders' congress and decision of the managing board for joint-stock companies; or decision of the owner; for one-member limited liability companies, or decision of the members' council; for limited liability companies with two or more members, on the addition or reduction of securities business forms;

c/ Tentative business plan following the addition or reduction of securities business forms.

3. Within 30 days after receiving valid dossiers, the State Securities Commission shall notify in writing the approval of change or addition of securities business forms. In case of disapproval, the State Securities Commission must clearly state the reasons therefor in writing.

4. Securities companies getting the approval of change or addition of securities business forms shall have to complete the procedures for blocking additional capital (if any) and making business re-registration according to the provisions in Clauses 2, 3 and 4, Article 6 of this Regulation. In cases where they use undistributed after-tax profits to increase capital and add securities business forms, the securities companies may use their latest audited annual or quarterly financial statements to prove that the undistributed profits are enough to supplement their legal capital.

Article 8.- Re-granting of securities business licenses

1. Securities companies, which have already been granted securities business licenses and wish to effect their division, split-up, consolidation, merger or transformation, transformation of one-member limited liability companies, collectively referred to as the company reorganization, shall have to carry out the procedures for re-granting securities business licenses.

2. Securities business licenses shall be re-granted only if the reorganized companies, after being divided, split up, consolidated, merged or transformed, still satisfy the conditions for granting securities business licenses prescribed in Article 66 of Decree No. 144/2003/ND-CP.

3. A dossier of application for re-granting of securities business license comprises:

a/ An application for re-granting of securities business license (made according to a set form);

b/ Resolution of the shareholders' congress and decision of the managing board, for joint-stock companies; or decision of the owner, for one-member limited liability companies, or decision of the members' council, for limited liability companies with two or more members, on the reorganization of the company;

c/ The reorganized company's charter;

d/ The reorganized company's organization and business operation plan.

4. Procedures for re-granting business licenses

a/ The time limit for re-granting securities business licenses shall be 30 days after the State Securities Commission receives the valid dossiers. In case of refusal to re-grant securities business licenses, the State Securities Commission must clearly state the reasons therefor in writing.

b/ The State Securities Commission shall officially re-grant securities business licenses after the applying organizations complete the procedures for business registration according to the current law provisions.

Article 9.- Fees for granting, re-granting, amendment and supplementation of securities business licenses

Securities companies shall pay fees for granting, re-granting and supplementation of their licenses according to law provisions.

Article 10.- Transfer of shares or contributed capital portions to foreign securities business organizations

1. Shares or contributed capital portions in securities companies may be transferred to foreign securities business organizations at percentages prescribed by the Prime Minister.

2. The sale of shares or contributed capital portions valued at over 5% of a securities company's charter capital to foreign securities business organizations must be approved by the State Securities Commission.

3. A dossier of application for transfer of shares or contributed capital portions to a foreign securities business organization comprises:

a/ An application for transfer of shares or contributed capital portions (made according to a set form);

b/ Resolution of the shareholders' congress and decision of the managing board; for joint-stock companies; or decision of the owner, for one-member limited liability companies; or decision of the members' council, for limited liability companies with two or more members, on the transfer of shares or contributed capital portions to the foreign securities business organization;

c/ Valid copy of the establishment license or business registration certificate or equivalent legal documents of the foreign securities business organization;

d/ Valid copy of the foreign securities business organization's charter;

e/ In-principle agreement on the transfer of shares or contributed capital portions between the Vietnamese party and the foreign securities business organization.

4. Within the time limit of 15 days after receiving valid dossiers, the State Securities Commission shall notify in writing its approval of the transfer of shares or contributed capital portions to foreign securities business organizations. In case of disapproval, the State Securities Commission must clearly state the reasons therefor in writing.

Article 11.- Setting up and closure of securities business companies' branches

1. Securities companies wishing to set up or close down their branches must obtain the State Securities Commission's approval.

2. A dossier of application for setting up a branch comprises:

a/ An application for setting up the securities company's branch (made according to a set form);

b/ Securities business plan of the to be-set up branch for the first two years;

c/ Written description of material and technical foundations in service of the branch's business activities (made according to a set form) enclosed with papers evidencing the right to use the area for the branch's office;

d/ Valid dossiers of application for securities business practice certificates, as prescribed in Article 32 of this Regulation of the director, deputy director and business staff members of the branch in cases they have not yet had such certificates;

e/ Valid dossiers of 2 staff members conducting the securities custody operation according to the provisions of the Regulation, on securities registration, custody, clearing and payment, promulgated by the Finance Ministry.

3. A dossier of application for closure of a securities company's branch comprises:

a/ An application for closure of the branch (made according to a set form);

b/ Written explanation of the reason(s) for branch closure.

4. Within the time limit of 15 days after receiving valid dossiers, the State Securities Commission shall notify in writing its approval of setting up or closure of securities companies' branches. In case of refusal, the State Securities Commission must clearly state the reasons therefor in writing.

Article 12.- Relocation of head offices, branches

1. Securities companies wishing to relocate their head offices or branches must obtain the State Securities Commission's approval.

2. A dossier of application for relocation of a head office or branch comprises:

a/ An application for relocation of a head office or branch (made according to a set form);

b/ Written description of material and technical foundations of the head office or branch in the locality where the new head office or branch is to be located (made according to a set form), enclosed with papers evidencing the right to use the area for the head office or branch office.

3. Within the time limit of 15 days after receiving valid dossiers, the State Securities Commission shall notify in writing its approval of relocation of securities companies' head offices or branches. In case of disapproval, the State Securities Commission must clearly state the reasons therefor in writing.

Article 13.- Transaction bureaus of securities companies

1. Securities companies are entitled to set up their transaction bureaus in the provinces and centrally-run cities where their head offices or branches are located. The setting up and closure of transaction bureaus must be approved by the State Securities Commission.

2. Transaction bureaus are entitled to open securities transaction accounts, receive securities for custody, receive and transmit orders to their transaction bureaus/branches to which they are attached.

3. A transaction bureau of a securities company must satisfy the following requirements:

a/ Having at least one staff member who possesses the securities business practice certificate and one staff member who conducts the securities custody operation;

b/ Having information-disclosing equipment;

c/ Having an adequate material foundation to ensure securities transaction and custody operations.

4. A dossier of application for setting up of a transaction bureau comprises:

a/ An application for setting up of a securities transaction bureau (made according to a set form);

b/ Written description of material and technical foundation in service of business activities of the transaction bureau (made according to a set form), enclosed with papers evidencing the right to use the area for the transaction bureau's office;

c/ List of business staff and custody operation staff working at the transaction bureau;

d/ Valid dossiers of staff members conducting the securities custody operation according to the provisions of the Regulation on securities registration, custody, clearing and payment promulgated by the Finance Ministry in cases where such staff members have not yet registered the custody operation with the State Securities Commission.

5. A dossier of application for closure of a transaction bureau comprises:

a/ An application for closure of a securities transaction bureau (made according to a set form);

b/ Written explanation of the reasons for closure of the transaction bureau.

6. Within the time limit of 15 working days after receiving valid dossiers, the State Securities Commission shall notify in writing its approval of the setting up or closures of transaction bureaus of securities companies. In case of disapproval, the State Securities Commission must clearly state the reasons therefor in writing.

Article 14.- Order-receiving agents

1. In the course of operation, securities companies are entitled to set up their order-receiving agents in localities where their head offices or branches are not located and take full responsibility for activities of such order-receiving agents.

2. Order-receiving agents are entitled to receive, preliminarily check and transmit orders to securities companies' head offices or branches under contracts with securities companies. Order-receiving agents are neither allowed to open securities transaction or securities custody accounts, nor provide securities consultancy directly to their clients.

3. Order-receiving agents of securities companies must satisfy the following requirements:

a/ Being legal persons;

b/ Having equipment for disclosing information on transactions to clients;

c/ Agents' staff members who receive orders and those who preliminarily check orders must possess professional securities certificates prescribed in Clauses 1.a and 1.c, Article 31 of this Regulation.

4. Within 5 working days before their order-receiving agents commence their operation, securities companies must send notices (made according to a set form) on agents' locations and lists of persons competent to preliminarily check orders enclosed with their curricula vitae, lists of order-receiving staff members and contracts on setting up of order-receiving agents to the State Securities Commission.

5. Within 7 working days after the closure of order-receiving agents, securities companies shall have to send notices (made according to a set form) enclosed with the written liquidations of contracts on setting up order-receiving agents to the State Securities Commission.

Article 15.- Cessation of business operations

1. Securities companies wishing to cease one or several licensed business operations must obtain the State Securities Commission's approval.

2. Dossiers and procedures of application for approval of securities business cessation:

a/ An application for business cessation (made according to a set form);

b/ Written explanation of the reason(s) for business cessation;

c/ Plan on settlement of relevant interests and obligations.

3. Within the time limit of 15 working days after receiving valid dossiers, the State Securities Commission shall notify in writing its approval of securities business cessation. In case of disapproval, the State Securities Commission must clearly state the reasons therefor in writing.

Article 16.- Suspension, withdrawal of business licenses

Securities companies may be suspended from operation or have their business licenses withdrawn according to the provisions of Article 71 of Decree No. 144/2003/ND-CP.

Chapter III

SECURITIES BUSINESS ORGANIZATION AND OPERATION

Article 17.- Organization of securities companies

1. Securities companies must be structured into sections with adequate business staff having securities business practice certificates to ensure the performance of licensed securities business operations.

2. The organizational structures of securities companies must ensure the separation of business activities of the securities companies' owners from business activities of the securities companies, as well as distinction between brokerage activities for clients and dealing activities of the companies, or between dealing activities and investment portfolio management activities.

3. Securities companies must promulgate the internal control process and have at least one full-time officer in charge of internal control, who must possess all professional securities diplomas and certificates according to the provisions in Clause 1, Article 31 of this Regulation.

Article 18.- Principles of business operation

In the course of business operation, securities companies have the rights and obligations prescribed in Article 70 of Decree No. 144/2003/ND-CP and must observe the following operation principles:

1. Complying with the legislation on securities and securities market.

2. Formulating the professional process for each licensed securities business form.

3. Supplying information to clients in a full, truthful and prompt manner.

4. Prioritizing the execution of clients' orders before their own orders.

5. Keeping secret information related to clients except for cases where they supply information at requests of competent State agencies according to law provisions.

6. Ensuring enough financial sources to meet the business demands and off set risks in business activities.

7. Not giving or receiving any remuneration in contravention of their obligations in business operation.

8. Fulfilling all obligations toward their clients under law or signed contracts.

9. Not using clients' money to purchase, sell assets or securities for themselves or for a third party.

10. Not investing in other fund management and/or securities companies. Members of managing boards/members of members' council/chairmen, members of directorates, members of control boards of securities companies must also abide by this Regulation.

11. Fully exercising and performing the rights and obligations of custody members according to the Regulation on securities registration, custody, clearing and payment, promulgated by the Finance Ministry.

12. Abiding by the provisions of Articles 103, 104, 105, 106, 107 and 108, Chapter XI of Decree No. 144/2003/ND-CP on prohibited acts.

13. Being entitled to collect charges when providing the services defined in Articles 19, 21, 22, 23 and 24 of this Regulation to clients according to law provisions.

Article 19.- Brokerage operation

1. When conducting transactions of purchasing or selling securities for their clients (domestic investors and foreign investors), securities companies must open securities transaction accounts, one for each client, on the basis of the contracts signed between such clients and companies. Besides the contents agreed upon by the two contractual parties in compliance with law provisions, contracts must have the prescribed basic contents.

2. In cases where business staff members of securities companies open securities transaction accounts, the companies must notify the codes of such persons' accounts to the State Securities Commission, the Securities Trading Center or the Stock Exchange within 5 working days after the opening of such securities transaction accounts.

3. Securities companies must separately manage money and securities of each client; manage clients' money and securities separately from their own money and securities.

4. Securities companies must open special-use demand deposit accounts in Vietnam dong and foreign currencies at commercial banks licensed to deal in foreign exchange for keeping the whole deposit for clients' securities transactions. Companies shall use such accounts only for payment for clients' securities transactions at companies or refund money to the very clients that open accounts in their names at their requests. The conversion of foreign currencies into Vietnam dong for effecting securities transactions shall be made as agreed upon in account opening contracts between securities companies and their clients in compliance with the law provisions on foreign exchange management.

5. Securities companies must not be mandated by clients to effect the transfer of money between their accounts opened at such securities companies.

6. Securities companies must ensure the supply of adequate information on accounts to clients at their requests.

7. Securities companies shall only be allowed to receive orders from clients that have sufficient deposited money and securities at the rates prescribed by law and must take necessary measures to ensure the clients' solvency when transaction orders are executed.

8. Securities companies may receive clients' orders at their head offices, branches, transaction bureaus or order-receiving agents, provided that all transaction orders must go through their head offices or branches before being transmitted to the Securities Trading Center or Stock Exchange.

9. Securities companies and their staffs must not be mandated by clients to decide to choose securities types, quantity and prices and conduct transactions of purchasing or selling securities on securities transaction accounts opened by clients at such companies.

10. In cases where clients open securities custody accounts at custody organizations being commercial banks or foreign banks' branches, securities companies must guide the procedures for securities purchasing and selling transactions for clients and sign written contracts with custody organizations.

Article 20.- Dealing operation

1. Securities companies must ensure sufficient money and securities to pay for their own transaction orders.

2. When making securities dealing, securities companies must not:

a/ Invest in stocks of companies that own more than 50% of their charter capital;

b/ Make investment equal to more than 20% of the total number of a listing organization's stocks in circulation.

c/ Make investment equal to more than 15% of the total number of a non-listing organization's stocks in circulation.

d/ Make investment or contribute capital equal to more than 15% of the total contributed capital of a limited liability company.

3. In cases where securities companies make investment in excess of the limits prescribed in Clause 2 of this Article, they shall be handled according to current law provisions.

Article 21.- Issuance underwriting operation

When underwriting the securities issuance, securities companies must comply with the provisions on issuance underwriting in Articles 11 and 15 of Decree No. 144/2003/ND-CP and documents guiding the issuance of stocks and bonds to the public, promulgated by the Finance Ministry.

Article 22.- Financial consultancy and securities investment operations

1. Securities companies licensed to conduct financial consultancy and securities investment operations shall be allowed to provide services at clients' requests in the following domains:

a/ Direct consultancy on securities investment for clients;

b/ Consultancy on financial restructuring; consultancy on division, split-up, consolidation and merger of enterprises;

c/ Consultancy on securities issuance and listing by enterprises.

2. When providing direct consultancy on securities investment to clients, securities companies and their business staffs must:

a/ Adhere to the professional ethics;

b/ Ensure the independence, honesty, objectivity and scientism of consultancy activities;

c/ Not conduct activities which may make clients and the public misunderstand about prices, value and nature of any securities type;

d/ Not take acts of supplying untruthful information to induce or solicit clients into purchasing or selling securities of a certain type;

e/ Keep confidential information received from users of consultancy services in the course of providing consultancy services except for cases where it is so agreed by clients or otherwise provided for by law;

f/ Be held responsible before law for consultancy activities and pay damages to consultancy service users when breaching commitments in consultancy contracts.

3. When providing consultancy to enterprises on securities listing, securities companies must comply with the following principles:

a/ They must sign contracts with consultancy-seeking organizations. Contracts must clearly state the rights and obligations of consultancy-providing and consultancy-seeking parties in preparing dossiers of application for listing and other relevant matters.

b/ They shall have to guide organizations applying for listing in recognizing their rights and obligations when listing securities;

c/ They shall take joint responsibility for contents in dossiers of application for securities listing.

Article 23.- Investment portfolio management operation

1. Securities companies licensed for investment portfolio management operation may be mandated to manage investment portfolio for each investing organization or individual on the contractual basis. Besides the contents agreed upon by the two parties in compliance with law provisions, an investment portfolio management contract between a securities company and its client must have the basic contents specified in the Appendix to this Regulation (not printed herein).

2. When managing investment portfolios, a securities company must open a deposit account in its name at a commercial bank for each mandating client and shall only be allowed to use money on such account in strict compliance with the provisions on investment portfolio management contracts or written instructions of the client.

3. Securities companies must immediately notify mandating clients of the abnormal fluctuation of prices of securities on the investment lists of such clients and make periodical reports on investment, then send them to each client.

Article 24.- Other financial services

1. Securities companies may act as agents for issuance of listed or non-listed securities of issuing organizations in compliance with law provisions.

2. Apart from the licensed securities business forms, securities companies may provide consultancy on equitization, evaluation of enterprises and other financial services in compliance with law provisions.

Article 25.- Liquidity capital

1. In the course of operation, securities companies must maintain the minimum liquidity capital rate of 5% of the total adjusted liabilities. The method of calculating liquidity capital is prescribed in the Appendix to this Regulation (not printed herein).

2. Within 48 hours after detecting that the liquidity capital is below the rate prescribed in Clause 1 of this Article, securities companies must report such in writing to the State Securities Commission and take necessary measures to maintain the minimum liquidity capital within 6 transaction days.

3. Securities companies which fail to remedy the shortage of liquidity capital shall be handled according to current law provisions.

Chapter IV

REPORTING AND INFORMATION DISCLOSURE REGIMES

Article 26.- Reporting regime

1. Periodical reports:

a/ Periodical reports include:

i. Monthly operation report (made according to a set form);

ii. Liquidity capital report;

iii. Quarterly financial statement;

iv. Audited annual financial statement.

b/ Time limits for submitting periodical reports:

i. Within 5 working days after the end of a month, securities companies shall submit their monthly operation reports and liquidity capital reports to the State Securities Commission;

ii. Within 20 days after the end of a quarter, securities companies shall submit their quarterly financial statements to the State Securities Commission;

iii. Within 90 days after the end of a fiscal year, securities companies shall submit their audited annual financial statements to the State Securities Commission.

2. Extraordinary reports:

a/ Securities companies shall report to the State Securities Commission, the Securities Trading Center when the following events occur:

i. Their business files and documents are stolen or lost;

ii. Their business operations are partially or entirely paralyzed;

iii. Members of their directorates are arrested by law enforcement agencies, are missing, die or lose their act capacity;

iv. They use more than 50% of their charter capital to procure facilities, equipment and fixed assets, for securities companies licensed for dealing operation; or more than 75% of their charter capital to procure facilities, equipment and fixed assets, for securities companies not applying for dealing license.

b/ Time limit for extraordinary reports:

i. Within 24 hours after the occurrence of events mentioned at Point a.ii, Clause 2 of this Article;

ii. Within 3 working days after the occurrence of events mentioned at Points a.i, a.iii and a.iv, Clause 2 of this Article.

c/ For events mentioned at Point a.iv, Clause 2 of this Article, securities companies must apply all necessary measures (increase of charter capital or sale of assets) to restore the prescribed limit within 3 months after the excess of the limit.

3. In case of necessity, in order to protect the interests of investors, the State Securities Commission may request securities companies to report in writing on information on their organization and operation.

Article 27.- To be reported changes

1. When changing members of their managing boards/members' councils (chairmen or members of managing boards, chairmen or members of members' councils), their presidents, directorate members, the securities companies must send written notices (made according to a set form) enclosed with curricula vitae of the said individuals to the State Securities Commission. For case of change of their general directors (directors), the securities companies shall enclose papers proving the satisfaction of the conditions prescribed in Article 38 of this Regulation by the expected appointees. The State Securities Commission may make recommendations regarding the appointment of general directors (directors) in cases where the appointees fail to meet the law-prescribed conditions.

2. When increasing or decreasing their charter capital, securities companies shall send to the State Securities Commission notices thereon (made according to a set form) enclosed with valid copies of their business registration certificates with the dates registered for charter capital change already determined by the business registration agencies within 10 working days after receiving the modified business registration certificates.

3. When changing their names, securities companies must send to the State Securities Commission notices thereon (made according to a set form) enclosed with valid copies of their business registration certificates with the dates registered for renaming already determined by the business registration agencies within 10 working days after receiving the modified business registration certificates.

4. When amending and/or supplementing their charters, securities companies must send to the State Securities Commission notices thereon (made according to a set form) enclosed with the amended charters already approved by competent agencies within 10 working days after such charters are approved.

Article 28.- Information disclosure regime

Securities companies implement the information disclosure regime according to the provisions of Article 56 of Decree No. 144/2003/ND-CP and documents guiding the information disclosure on the securities market, promulgated by the Finance Ministry.

Chapter V

SECURITIES BUSINESS PRACTICE

Article 29.- Principles of securities business practice

General directors, deputy general directors (directors, deputy directors), business staffs of securities companies must possess securities business practice certificates.

Article 30.- Conditions for being granted securities business practice certificates

1. Securities business practice certificates shall only be granted to individuals at requests of securities companies where such practitioners work or at requests of representatives of founding members, founding shareholders, owners of organizations applying for securities business licenses for case of application for both the securities business practice certificate and the securities business license.

2. Vietnamese citizens shall be granted securities business practice certificates when fully satisfying the following conditions:

a/ Having full legal capacity and civil act capacity;

b/ Neither being examined for penal liability, nor currently serving imprisonment sentences nor being deprived by the court of the practice right according to law provisions.

c/ Having graduated from universities;

d/ Possessing all professional securities certificates, granted by the State Securities Commission according to Article 31 of this Regulation.

3. Foreign citizens shall be granted securities business practice certificates when satisfying the following conditions:

a/ Satisfying the conditions prescribed in Clause 2.a, 2.b of this Article;

b/ Having securities business practice certificates granted by foreign competent agencies and law certificates applicable to the securities sector as defined in Article 31 of this Regulation. In cases where they do not have securities business practice certificates granted by foreign competent agencies, they must have all professional securities certificates according to the provisions in Article 31 of this Regulation;

c/ Having work permits granted by the Vietnamese Ministry of Labor, War Invalids and Social Affairs.

Article 31.- Professional securities certificates

1. Professional securities certificates, granted by the State Securities Commission include:

a/ Basic certificate in securities and securities market;

b/ Certificate of securities analysis and investment;

c/ Law certificate applicable to the securities sector.

2. The valid duration of professional securities certificates is 2 years for law certificates applicable to the securities sector and 3 years for other certificates, counting from the date of their granting till the date of application for securities business practice certificates.

Article 32.- Dossiers and procedures for granting securities business practice certificates

1. For Vietnamese citizens, a dossier of application for securities business practice certificate comprises:

a/ An application for securities business practice certificate (made according to a set form);

b/ Curriculum vitae of the applicant with certification by the local administration or the securities company where he/she works and 2 photos of 3 cm x 4 cm size;

c/ Valid copy of the university diploma;

d/ Valid copies of professional securities certificates;

e/ Judicial background card granted by the Justice Service of the province or centrally-run city where the applicant resides, within 3 months counting from the date of its granting to the date of application for securities business practice certificate;

f/ Valid copy of the labor contract or decision on recruitment or appointment of the applicant to work in the securities company.

2. For foreigners, a dossier of application for securities business practice certificate comprises:

a/ An application for securities business practice certificate (made according to a set form);

b/ Valid copy of the applicant's passport;

c/ Valid copy of the foreigner's work permit granted by the Ministry of Labor, War Invalids and Social Affairs;

d/ Valid copy of the securities business practice certificate granted by a foreign competent agency (if any) and law certificate applicable to the securities sector or valid copies of professional securities certificates.

3. Within 30 days after receiving valid dossiers, the State Securities Commission shall notify in writing the granting of securities business practice certificates. In case of refusal, the State Securities Commission must clearly state the reasons therefor in writing.

Article 33.- Extension of securities business practice certificates

1. Securities business practice certificates shall be valid for 3 years from the date of granting. Securities business practice certificates may be extended at requests of securities companies where the practitioners work. Each extension must not exceed 3 years.

2. One month before the expiry of the valid duration, if wishing to have securities business practice certificates extended, securities companies where business practitioners work must apply for extension (made according to a set form).

3. Securities business practice certificates shall be extended only when practitioners pass the test organized by the State Securities Commission.

4. In cases where securities business practitioners fail the test for extension of securities business practice certificates, they shall temporarily not be allowed to work in business sections till their securities business practice certificates are extended.

Article 34.- Change of securities business practice certificates

In cases where a practitioner moves to work for another securities company, such company shall have to carry out procedures of applying for change of securities business practice certificate for such individual. If his/her present securities business practice certificate is still valid, such individual shall be considered by the State Securities Commission for change thereof without having to take the test. Changed securities business practice certificates shall be valid within the remaining valid duration of old certificates.

Article 35.- Withdrawal of securities business practice certificates

1. Securities business practice certificates shall be withdrawn in the following cases:

a/ Practitioners no longer satisfy the conditions for granting of securities business practice certificates prescribed in Clauses 2 and 3, Article 30 of this Regulation.

b/ Practitioners no longer work for securities companies;

c/ Practitioners violate the provisions of Articles 103, 104, 105, 106 and 107 of Decree No. 144/2003/ND-CP.

d/ Securities business practice certificates expire but securities companies where practitioners work do not apply for extension according to the provisions in Clause 2, Article 33 of this Regulation or practitioners fail to meet the requirements prescribed in Clause 3, Article 33 of this Regulation.

2. One year after having their securities business practice certificates withdrawn according to the provisions in Clause 1.b of this Article, if practitioners continue working for securities companies, they must go through procedures for a test before applying for securities business practice certificates. In these cases, securities companies where practitioners work shall compile dossiers of application for securities business practice certificates according to the provisions of Article 32 of this Regulation.

Article 36.- Restrictions on securities business practitioners

Securities business practitioners must abide by the regulations on restrictions on securities business practitioners in Article 74 of Decree No. 144/2003/ND-CP.

Article 37.- Fee for granting securities business practice certificates

Securities companies where practitioners work shall pay the fee for granting, extension or change of practice certificates according to law provisions.

Article 38.- Appointment of general directors, directors

Persons who are appointed to be general directors or directors of securities companies must satisfy the following conditions:

1. Having worked for at least 3 years in the finance, banking or insurance domain;

2. Possessing securities business practice certificates or fully satisfying the conditions for granting of securities business practice certificates prescribed in Article 30 of this Regulation;

3. Not being practitioners who have their securities business practice certificates withdrawn by the State Securities Commission according to the provisions in Clause 2.c, Article 75 of Decree No. 144/2003/ND-CP.

Chapter VI

INSPECTION, SUPERVISION AND HANDLING OF VIOLATIONS

Article 39.- Inspection and supervision

1. Securities companies, securities business staff members shall submit to the inspection and supervision by the State Securities Commission and competent State agencies prescribed by law.

2. Securities companies submit to the management and supervision by the Securities Trading Center or the Stock Exchange according to law provisions and regulations of these organizations.

Article 40.- Handling of violations

Securities companies and securities business staff members that violate the regulations on securities business activities shall be handled according to current law provisions.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 41.- Implementation provisions

1. Securities companies shall formulate their working regulations and professional procedures in compliance with this Regulation.

2. The amendment and supplementation of this Regulation shall be decided by the Finance Minister.

For the Finance Minister

Vice Minister
LE THI BANG TAM